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Testimony: Improving the Cal Grant Program

Hans Johnson, Kevin Cook April 22, 2015

PPIC researchers Hans Johnson and Kevin Cook testified before the California Student Aid Commission last week at a hearing to provide information about improving the Cal Grant program. The program provides about $1.5 billion in grants to college students in California each year and is administered by the commission. The program provides grants to state residents attending approved institutions and is the largest source of state aid to California students. Here is a summary of the testimony.


Rapidly increasing costs to students, low completion rates, and lack of access to four-year colleges are key challenges facing the state and the Cal Grant program. Given relatively high rates of poverty among high school graduates, grant and scholarship aid is more important than ever in making college possible for many Californians. Currently, California ranks 47th among all states in the share of high school graduates that go to four-year colleges. Only about half of California State University (CSU) students earn a bachelor’s degree within six years, and less than half of community college students earn an associate degree or vocational certificate or transfer to a four-year college.

To improve outcomes, the California Student Aid Commission should invest in what works, taking into account both efficiency and equity. One possibility would be to provide incentives for completion by providing more funding for students taking a full course load of 15 units. Students who take only 12 units per semester are currently considered full-time students but will not acquire enough units to graduate in four years. Of course, making this change might require increasing the size of grants so that students would be able to cut back on the number of hours they work at jobs.

Student outcomes might also be improved by using Cal Grants to encourage enrollment at four-year colleges. One way to achieve this would be to provide tuition, as well as a living stipend, for students eligible for the University of California and CSU. Currently, some awards for the students with the lowest incomes provide a living stipend for four years but tuition support for only three years.

More and better data is necessary to properly evaluate these and other proposals for improving student outcomes. The best way to identify effective and equitable delivery of Cal Grant aid would be to develop a statewide longitudinal data base that follows students from high school through college and into the workforce. Such a database, already developed in many other states, would allow the commission to answer additional questions that would help them understand what works—and doesn’t—to effectively target grant aid in California.

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